Congress Raises Debt Ceiling, with Shifts and Cuts in Student Aid Funding - Fastweb
I misread the above info - it says Congress will probably demand a reduction in eligible semesters for Pells, but it has not yet been approved yet. The Obama Administration has placed a priority on preserving Pell grants, which has requiring cutting back on other programs in the budget deal. Here's a description of new changes to Pells that were approved. There may be more cuts in the near future, as part of ongoing budget deals.
Excerpts from link:
"Even though the debt deal devotes $17 billion to reducing a funding shortfall in the Pell Grant program and preserves the $5,550 maximum Pell Grant, the Pell Grant program remains at risk of cuts. The Pell Grant program is still left with a $1.3 billion funding shortfall in FY2012 and will probably suffer from funding shortfalls in subsequent years.
To address the remaining funding shortfall, Congress must either appropriate additional money for the Pell Grant program or make further cuts in student aid spending. The most likely scenario involves changing the eligibility requirements for the Pell Grant program, such as reducing the eligibility from 18 semesters to 12 and requiring at least half-time enrollment. Congress is unlikely to cut the maximum Pell Grant....
The debt deal eliminates subsidized interest on Stafford loans to graduate and professional students, effective for new loans made on or after July 1, 2012. It also eliminates all repayment incentives in the Direct Loan program for new loans made on or after July 1, 2012, except for discounts for borrowers who repay their loans via auto-debit. These changes do not affect existing loans. Of the estimated $21.6 billion in savings over ten years, a total of $17 billion is used to address the funding shortfall in the Pell Grant program. The remaining $4.6 billion is redirected toward deficit reduction."